Apple and Samsung: A Defining Rivalry In A Changed Mobile Market

Android devices are on the rise, giving Samsung an edge over Apple in the global smartphone market despite a recent patent suit that Samsung lost to its U.S. rival.

What a difference three
months can make.

At the end of August, Apple Inc seemed on top of
the world. Fresh off a resounding $1.05 billion U.S. legal
victory over arch-foe Samsung Electronics Co Ltd,
the company was gearing up to launch the fifth iteration of its
iconic iPhone. Just a week prior, its market value had surpassed
Microsoft Corp's and it became the most valuable
technology company in history.

That was then. Since winning a landmark U.S. patent
infringement case in August, its stock has dived 18 percent,
wiping $108 billion from its value. But the shares of defeated
party Samsung have surged, rising 16 percent.

But it is the Apple-Samsung rivalry that defines a global
mobile device industry with a growing list of struggling
players. Together, the two mobile juggernauts account for more
than 1 in 2 smartphones sold globally.

Analysts say Samsung is beginning to shed its aura as a
"fast follower" and becoming a serious innovator, while Apple
has failed to deliver on a truly seminal product in years - the
oft-rumored Apple TV remains a well-honed rumour.

"Apple's actions have started to appear as if innovation is
slowing and they're defending turf with a zero-sum market view
rather than continuing to innovate as a world-beating leader,"
said Tony Nash, managing director at IHS, a business information
provider.

The clash of the gadget titans underscores a broader battle
between Apple and Google's increasingly popular Android mobile
software, now installed on about two out of every three
smartphones sold.

But some Asian analysts also point to Samsung's very
different business model as helping it get a leg up on Apple.

The iPad maker's outsourcing structure provides fatter
margins, but cedes some control to an army of suppliers, while
Samsung's competitiveness is driven by keeping most of its
manufacturing in-house.

And while Apple focuses on a few high-end mobile devices,
Samsung's product breadth helps it scoop up new, less affluent
users who can then be driven towards higher-margin devices, such
as the phone-tablet combo Galaxy Note.

"In Asia, Samsung is still in the stronger growth position
when it comes to smartphones - bringing large-screen models to
the masses, re-introducing the pen with its Galaxy Note series
and also, at the lower-end, with its entry-level Galaxy Y
devices driving emerging markets like Indonesia and India," said